28 Oct 2008 15:23
PRIVATE EQUITY INVESTMENT - TENIZ SERVICE LLP
Tau Capital plc ("Tau") today announces that it has completed a private investment of US$19.37 million through a mezzanine-type loan instrument to Contour Caspian Ventures Ltd ("Contour"), a wholly-owned subsidiary of Visor Holding LLP ("Visor"). Contour is a 35% shareholder of Waterford International Holding Ltd ("Waterford"), a consortium owning a 51% controlling equity stake in Teniz Service LLP ("the Company" or "Teniz"). Teniz is an infrastructure development and services operator for the oil and gas industry in the Kazakh sector of the Caspian Sea. The proceeds of this investment, which were drawn down in one tranche, were used by Contour to fund Waterford's subscription in the equity capital of Teniz. Tau's investment in Contour, which is guaranteed by Visor, contains a conversion option in which the accruing interest of 18% per annum can be exchanged into equity shares in Waterford at pre-determined price at the discretion of Tau. Tau's principal investment of US$19.37 million is not capable of conversion into equity securities in Waterford.
Teniz was originally founded as a subsidiary of KazMunaiGaz Exploration & Production ("KMG"), the Kazakh national oil and gas company, to support the Kazakhstan Government's plans to develop infrastructure off the Caspian Sea coastal area in preparation of planned exploration and development of the Kashagan oilfield. The Company is based in Aktau in the western part of Kazakhstan on the Caspian shore. The Company's operations and services include the planning, development, construction and deployment of infrastructure to support marine-based oil production and exploration operations, as well as the provision of logistics services and maintenance for oil and gas exploration companies operating in the Caspian Sea. The Company has operations and facilities in four cities along the Caspian coast of Kazakhstan: Atyrau, Bautino (Fort Shevchenko), Aktau and Kuryk.
Brief transaction terms:
Type of investment: mezzanine-type loan (guaranteed by Visor) with a conversion option over accrued interest
Coupon: guaranteed accruing 18% per annum coupon, repayable on the maturity date of the loan if the conversion option is not exercised within 3 years
Conversion option: the accrued interest amount can be exchanged into equity shares in Waterford. The conversion option can be exercised at the discretion of Tau at any time within the term of 3 years at a pre-determined price, which would provide Tau with an equity interest of between 3.5% and 10% in Waterford (and an indirect equity interest of between 1.79% and 5.1% in Teniz). The principal is not capable of conversion into equity securities in Waterford
Term: 3 years (principal of US$19.37 million (and any accrued interest not otherwise converted) repayable in full on the maturity date)
Investment highlights:
Teniz is an established company, having developed a substantial infrastructure platform in the last three years, including ship terminals, storage facilities, accommodation facilities and electricity grids.
The Company has secured (or is in the process of securing) service contracts with major oil companies, and has formed joint ventures with several international infrastructure management companies to operate facilities and ports.
The widespread reach through four cities along the Caspian coast of Kazakhstan, Atyrau, Bautino (Fort Shevchenko), Aktau and Kuryk, will allow Teniz to develop a leading infrastructure platform along the Caspian Sea in Kazakhstan.
The Kashagan Field was one of the largest oilfield discoveries in the last decade; Teniz has the potential to benefit from the increasing oil and gas industry activity in the Caspian Sea.
As a 49% shareholder in Teniz, KMG will enable Teniz to capitalise on additional expertise required to service oil and gas exploration companies and their needs.
Philip Lambert, Chairman of Tau, commented:
"We are pleased to announce our largest private equity investment to date in Teniz. This investment gives Tau investors exposure to the rapid growth of infrastructure in the Kazakh sector of the Caspian Sea."
--ENDS-
Further information, please contact:
Tau Capital plc Cynthia Edwards
Tel: +44 (0) 1624 681381
Numis Securities Ltd
Nominated Adviser: Nick Westlake / Brent Nabbs
Corporate Broking: Alex Ham
Tel: +44 (0) 20 7260 1000